C-ASBA mandatory for public offerings from Feb 23

2018-02-09

All public offerings from February 23 will have to be floated through Centralized Applications Supported by Blocked Amount (C-ASBA) system.

According to the CDS and Clearing Ltd, public companies floating initial public offering (IPO) and follow-on public offering (FPO) must issue their shares through the new system which has been touted as faster, easier and simpler for investors as well as member bank and financial institutions and issue managers.

The new system, which is an upgraded version of the Applications Supported by Blocked Amount (ASBA), allows investors to apply primary shares through a uniform process at all ASBA members which is operated in a centralized way by the CDSCL.

Under C-ASBA, all institutions involved in the public issue process are woven under the centralized electronic system operated by the CDSCL through computer software. Gupta said that the C-ASBA will reduce the time taken for the allotment of public issue as the demat accounts of the applicant gets verified prior to the application under this new system.

The mandatory implementation of the C-ASBA has also enabled investors to apply such shares online.

In a press meet organized in the capital on Thursday, CDSCL CEO Dev Prakash Gupta said that investors will have both the options -- through bank and financial institutions (BFIs) and online (using www.meroshare.cdsc.com.np) -- to submit application for the new IPO or FPO of any public company.

Under the C-ASBA system, investors should first get C-ASBA Registration Number (CRN) from BFIs who provide such number after verification of demat account and bank details. To apply shares, investors will have to visit the BFIs, fill up their CRN Number, applied units of shares and demat account number. BFIs make an entry and confirm the application instantly, according to Gupta.

Similarly, the application of shares can be also made online if an investor gets registered with C-ASBA portal - www.meroshare.cdsc.com.np.

Gupta also said that investors do not need to pay anything for applying shares through the C-ASBA.

The capital market is now gearing up for the implementation of C-ASBA after the successful implementation of the ASBA system. Under the ASBA system, investors' money equivalent to the subscription of initial public offering (IPO) or follow-on public offer (FPO) gets blocked until the share allotments are made. Respective bank or financial institutions (BFIs) will deduct funds from the applicant's bank account only after share allotments are made and the remaining fund is freed.